Household Income Events

INTRODUCTION

Household Income Events are appropriate to model a change in Household Income isolated from Industry production and payroll. In Household Income Events, you can specify the specific income group(s) receiving the income. Examples would be a government stimulus check or tax refund for individuals.

Household Income Event values should include all new Household Income the residents will receive including personal tax and savings. IMPLAN will automatically deduct personal tax and savings from the Event value input. The remaining portion is applied to that Household Income group's spending on goods and services. However, not all of the goods/services demanded are available or produced locally. Household spending of income on imported goods and services will be treated as leakage and those purchases will not be counted in the impact results. In most instances, the impact results will be lower than the user input for Event Value.

HOUSEHOLD INCOME EVENTS

IMPLAN can be accessed via app.IMPLAN.com. Once you are logged in, you will be directed to the IMPLAN dashboard. From the dashboard you can navigate to the Regions, Impacts, or Projects screen. 

Once you have chosen your Region and named your new Project, you will be directed to the Impacts screen. From here, click on Add New Event to create a Household Income Event. In this set of examples, 2018 Nevada data is utilized.

Household Income represents the income received by people for their participation in production, from government and business transfer payments, and from returns on capital (e.g., interest payments, dividends). Household Income Events allow the analyst to pick which income group(s) will receive the gain or loss of income.

In this example, there will be a stimulus check for households that earn less than $40,000. We are told this will result in $2,000,000 of new income in Nevada for households earning less than $15K, $1,500,000 for households earning between $15-30K, and $3,000,000 for households earning between $30-40K. Therefore, we will set up one Household Income Event for each household level. A total of $6.5M is being analyzed.

Now that you have your Events, ensure that all are highlighted in teal by clicking on them individually or checking Select All Events at the top of the screen. Now the Events can be dragged into your Group on the right.

You will know when the Events have populated in the Group when the number in the upper right of the Group box equals the number of Events.

Now click Run in the bottom right of the Impacts Screen.

The first thing you will notice is that there are no Direct or Indirect Effects. Household Income Events only affect household spending by local residents, so there will only be Induced Effects. Learn more in the article Explaining Event Types. 

In this example, we included three Events, so the default on the Results screen will include all three. If you want to look at the impacts for just one Event, click on Filters and search for the Event Name that you want to see.

NOTE

The example above analyzed stimulus payments to Households in Nevada earning less than $40k annually. This resulted in additional economic benefits to the Region of $6.9M; higher than the initial input values totaling $6.5M. This is not always the case when running Household Income Events, as sometimes the impact results are lower than the Event value input. As this analysis was run at the state level opposed to a county, the leakages due to imports were reasonably low. Additionally, this example analyzed spending by lower income groups, who tend to save less and spend more of their earnings on average. 

RELATED ARTICLES

Explaining Event Types

Written July 13, 2020

Updated July 27, 2022